14 Sep 2021
Over the last 18 months, many of us have been out of the workplace - either working from home or on furlough. This has given us the opportunity to imagine ‘life without work’ and some of us may begin to wonder if we actually want to return to the workplace - could retirement be a viable option?
This may be a question you are considering for yourself, or it could be a route that a member of your team is looking at as an alternative to returning to work. In either case, here are five steps to consider when planning your retirement
The first thing to consider is will your finances support your vision of retirement? If the answer to this question is YES, then you can go straight to the next step. However, if the answer is NO, you need to identify how you can effectively finance your retirement and a good, independent financial advisor can guide you through how to achieve this. The usual starting point of any financial conversation is knowing how much you spend on your household bills (your Personal Survival Budget), before considering any additional discretionary costs you may incur, such as holidays, social/leisure activities and the little luxuries in life
If your projected pension can’t fully support your retirement financially at this time, could a change in your employment give you what you are looking for? Do you need to top-up your pension contributions or do you need to find an additional sources of income? This is where independent financial advice is essential; the earlier you get expert advice on this topic, the easier it is to close your pension income gap
The next step in planning your retirement is to find a purpose. Fundamentally, most of us go to work to pay the bills, but work is not a purpose – work is a means to an end. However, work can also be how we define ourselves – I’m a teacher / I’m a plumber / I’m unemployed – this is not what we are, it’s what we do. So when we retire, we need to identify how we will re-define our self and answering the following questions may help us to do this:
This is where many people struggle with retirement. We have this dream of not working ... it’s like our dream of winning the lottery ... but when you retire, that dream becomes a reality. At work, our purpose may be defined by our employer – we have a job description; we know how and where we slot into the organisation; we know what we will do each day. Once you retire, that will go away and it’s up to you to provide the answers to the above questions. If you don’t clearly define your purpose, you can become rudderless, which can negatively impact both your confidence and your mental health. So, spend some time to identify what are the things that you always wanted to do but never had the time to accomplish? How can you make a difference?
Once you have defined your purpose, you need to create a structure. Again, whilst we were working we have structure – our day is broken down into a series of activities, both at work and at home – but when you retire, this is something else that you will need to define for yourself. Having a structure can help give purpose to your life; think about ...
The third step of retirement planning is focusing on how you will interact with others. It can be easy to isolate yourself – family members will have their own commitments; work colleagues will still be working; you may have had a long commute and the people you previously interacted with may live nearer to your work than your home. You need to identify activities that allow you to interact with others, both those you know and those who you don’t yet know. Ask yourself ...
When it comes to social interaction, another factor to consider is how your retirement will impact your family. Going back to family members, if your partner is still working, how will you cope with being by yourself? Or if they don’t work or work from home, how will they cope with you being around all day? One challenge of retirement is that different people within the family unit may have different expectations, so it’s well worth having a conversation with other family members to establish those expectations and reset the ground rules. Remember, never assume you all view your retirement in the same way
Finally, you need to focus on your health – both your physical and your mental health. Having purpose, structure, interaction and the wherewithal to finance your retirement will definitely help here but your physical health needs to be a focus too. Take up at least one activity that allows you to exercise regularly or better yet, pick something you can do with your partner and something else you can do with others, or on your own to give you the energy to fully enjoy your retirement
Our ‘life after work’ is something that all of us need to consider at some stage but our retirement plan must take more factors into account than just our pension pot – your pension funds your retirement but you still need to define how you live your retirement if you are going to make the most of it.
If you are planning your own exit strategy or helping a team member to do the same, this workbook may help you - download your free copy now
For more information on helping you are your team navigate the changes that life throws at us, please get in touch
Image by Aaron Burden from Unsplash
Carol is very personable, calm, and most importantly to me, professional & trustworthy